Turin OIAs

Outward Investmentand the role of OIAs : Outward Investment and the role of OIAs UNCTAD Training Course 20 June - 18 July 2001, Geneva - Turin Presented by Paul Wessendorp
Trends in outward investment: Trends in outward investment FDI outflows, global and by region, 1970-1999 (billions of US$)
FDI outflows and inflows by region, 1999: FDI outflows and inflows by region, 1999
The 10 largest sources of FDI, 1999: The 10 largest sources of FDI, 1999 20 20 23 25 35 46 51 108 151 199 0 20 40 60 80 100 120 140 Sweden Japan Hong Kong, China Belgium & Luxembourg Spain Netherlands Germany France United States United Kingdom (US$ billions)
FDI outward stock of the United Kingdom by top 5 industries, 1997: FDI outward stock of the United Kingdom by top 5 industries, 1997 20 15 12 12 9 32 Finance Mining, quarrying and petroleum Food, beverages and tobacco Coke, petroleum and nuclear fuel Real estate Other industries
FDI outward stock of the United States of America by top 5 industries, 1997: FDI outward stock of the United States of America by top 5 industries, 1997 36 11 9 7 6 31 Finance Trade Chemicals and chemical products Mining, quarrying and petroleum Electrical machinery Other industries
FDI outward stock of France by top 5 industries, 1997: FDI outward stock of France by top 5 industries, 1997 26 17 8 7 6 36 Finance Business services Chemicals and chemical products Food, beverages and tobacco Mining, quarrying and petroleum Other industries
The worlds 12 largest TNCs(ranked by foreign assets, 1998): The worlds 12 largest TNCs (ranked by foreign assets, 1998) United States: General Electric (1); General Motors (2); Ford Motor Company (4); Exxon Corporation (5); IBM (7) Netherlands/United Kingdom: Royal Dutch/Shell Group (3) BP Amaco (8 - UK only); Unilever (12) Japan: Toyota (6) Germany: DaimlerChrysler (9); Volkswagen Group (11) Switzerland: Nestlé SA (10) Venezuela: Petroleos de Venezuela SA (91) First and only developing country TNC on top 100 list
Why can outward investment be beneficial to a home country?: Why can outward investment be beneficial to a home country? FDI furthers the economic integration of the home country in the world economy FDI gives access to raw materials FDI allows companies to exploit better their competitive advantages (expansion of operations and market) FDI for cost reasons can lead to the upgrading of production activities in the home country (labour-intensive activities are moved to foreign affiliates) Outward FDI brings increased direct investment income from abroad
Types of home country measures: Types of home country measures Information provision and technical assistance Financial support Fiscal support Investment insurance Investment-related trade measures Promoting technology transfer
Outward Investment Promotion Agencies and Institutions (OIAs): Outward Investment Promotion Agencies and Institutions (OIAs) Instruments for the promotion, facilitation and protection of outward investment.
Types of OIAs: Types of OIAs Outward Investment Promotion Agencies (OIPAs) Development Finance Institutions (DFIs) Investment Guarantee Schemes (IGSs)
What Outward Investment Promotion Agencies do?: What Outward Investment Promotion Agencies do? Helping investors make their first steps ... Results of an UNCTAD survey (1999)
Main services provided by OIPAs: Main services provided by OIPAs 0 20% 40% 60% 80% feasibility studies country information conferences promotional material info on investment opportunities matchmaking investment missions
What services Development Finance Institutions provide?: What services Development Finance Institutions provide? Loans, equities … Results of an UNCTAD survey (1999)
Main services provided by DFIs: Main services provided by DFIs 0 20% 40% 60% 80% 100% investment missions project development country information guar./ins. non-comm.risks liaison investors-finance institutions equities loans
What Investment Guarantee Schemes do? : What Investment Guarantee Schemes do? Insure the investor’s risks … Results of an UNCTAD survey (1999)
Main services provided by IGSs: Main services provided by IGSs 0 20% 40% 60% 80% feasibility studies project development liaison investors-finance institutions guarantees/insurance commercial risks guarantees/insurance non-commercial risks
How can the network of OIAs be of use to developing countries: How can the network of OIAs be of use to developing countries OIAs provide up-to-date information to potential investors on new investment locations offer OIAs regular updates on improvements in the host country’s investment climate and on new investment opportunities. OIAs are well connected with the investment community organize joint events and create partnerships with OIAs from important FDI home countries.
How can the network of OIAs be of use to developing countries: How can the network of OIAs be of use to developing countries Many OIAs provide loans and equity to foreign investments in developing countries use contacts in OIAs to help new investors identify financiers for their projects. An important obstacle to foreign investments are the higher risks involved make investors aware of available investment guarantee and insurance services.